WTO General Council

The WTO General Council held its meeting from Tuesday until today. It was the first major meeting after the infamous Hong Kong ministerial conference in December 2005. One outcome already became public: EU bans on genetically modified organisms contravenes trade rules, stated the dispute resolution panel in a preliminary ruling on Tuesday. (Greenpeace press release). It means that governments lose their ability to regulate in health and environmental fields despite scientific uncertainity. From a democratic point of view that's troublesome.

Further outcomes of the General Council are not yet open to the public. As the Hong Kong ministerial left a wide field of questions unsolved, more answers are to be expected from today's meeting. I want to take the chance and rediscuss specifically the trade issues concerning developing countries.

EU: European trade interests instead of development

The WTO - especially after the failure of Cancun - had a strong need to emphasise its concern for fair trade conditions with the developing world. The ministerial in Hong Kong has ingloriously failed to deliver any significant results in this matter, as major NGO's unanimously state (see, for example, the Oxfam briefing). Not surprisingly, it was the European Union who took the role of the major villain - fighting to upkeep trade-distorting agriculture subsidies and to push forward liberalization in the market access to developing countries for non-agricultural products (NAMA) and services.

1. Agricultural tariffs, subsidies and industrial tariffs

Both the US and the EU still protect fully their key agricultural markets with high tariffs. Meanwhile, they push hard for market access in services and the industrial field. Export-subsidies (that will run out in 2013) and domestic subsidies (that represent 80% and more of the trade distortions) leads to heavy dumping on the world market. Neither the EU nor the US plan to erase those domestic subsidies although they are anti-development and help keeping the world majority in poverty.

2. Fake development package

The development packages presented by the EU (and the US) are purely cosmetic. Preferences for the so-called least-developed countries (LDC) ammount to almost nothing. An example: Aid-for-trade was a new label for already development-assigned money "granted" by the EU ("recycled money", as Oxfam puts it) in exchange for market access concessions by the developing countries. Making development money a bargain chip is simply wrong.

WTO: Goals for the EU in 2006

Due to the compicated ratification process in the American congress and the negative overall-trend of the Doha-round in recent years a positive outcome of the WTO-negotiations is already much at risk. With its dirty post-colonial behavior the EU (and the US) risk to smash the Doha-round altogether. The result will be a major setback for developing countries (and, of course, for the EU as well, economically speaking).

Therefor the EU has to promote the following goals at the WTO in 2006:

- reduction of domestic subsidies for agriculture to end dumping at the world market
- true market access for developing countries and totally open market for LDCs.
- allow developing countries' governments flexibility in what markets they want to open for competition. Market access in services and NAMA must not be pushed forward any more.
- finally design a true development package, including easy access to cheap drugs for developing countries (in contrast to the complicated and burdensome current TRIPS-amendment)

As soon as results of the General Council are available, I'll discuss them further. (And don't ask me why I chose yellow shoes as the picture for this entry. But there's no easy imaginary association to the WTO)